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Business as Usual: Why ‘the Handshake’ Has Had Little Impact on the Fortunes of the Luo People

“How can Raila be happy with the Handshake when it has does nothing for us in Nyanza?” posed the women. “At least during the coalition government, the fish factories were revived. The nusu mkate [half bread] government delivered some economic dividends. The recent pact seems to have no economic agenda for the urban poor who bore the brunt of police brutality in the last presidential elections.

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Business as Usual: Why ‘the Handshake’ Has Had Little Impact on the Fortunes of the Luo People
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“The Luo community is happy Raila is back at the centre,” intoned our physician friend, Dr Sam Owino. In the last twelve months, since the surprise political rapprochement between President Uhuru Kenyatta and his antagonist-in-chief Raila Odinga, the talk about town has been how the Luos are now reaping from the so-called “Handshake”. “We’re no longer the political bogeyman of the state,” reiterated the Nairobi physician. “It has never been fun carrying the tag and burden of oppositional politics in the country for all these years.”

After the Handshake, which had been preceded by a piercing palpable tension across the country, Raila, the leader of the nascent opposition outfit, the National Super Alliance (NASA), broke ranks with his colleagues Kalonzo Musyoka, Musalia Mudavadi and Moses Wetangula to sue for peace with President Uhuru of the Jubilee Party. “Koro wan eisirkal,” (We’re now in government…we’re no longer in the opposition) said Raila soon after the Handshake, a statement that was reiterated by President Uhuru. A visitor to the country soon after the combustible double elections would never appreciate and digest fully the import of that statement.

No community in Kenya has borne the brunt of the state’s political malice and economic sabotage than the Luo people, observed Oduor. “The Luo people have suffered the greatest political harassment and assassinations in this country, starting with Argwings Kodhek, who was killed in January 1969…”

To a section of the Luo community, “being in the political cold,” is a phrase they identify with all too well. “The Luo people have been in the opposition effectively since 1966, when President Jomo Kenyatta shunted his Vice President Jaramogi Oginga Odinga,” said Bernard Oduor, an advertising and marketing manager of a Nairobi-based publishing company. “Let another community shoulder the weight of being always on the receiving end of the state’s anti-development brutal policies and constant violence.”

No community in Kenya has borne the brunt of the state’s political malice and economic sabotage than the Luo people, observed Oduor. “The Luo people have suffered the greatest political harassment and assassinations in this country, starting with Argwings Kodhek, who was killed in January 1969. Six months later, Tom Mboya, perhaps the greatest of Luo leaders, was killed, possibly by the same forces that took care of Kodhek through a freak accident.”

That same year, 1969, the government detained Jaramogi with other Luo leaders for standing up to Jomo and the Kiambu Mafia’s imperial tendencies, recalls Oduor. “It was a cruel testament of the political harassment by the successive government of Presidents Jomo Kenyatta and Daniel arap Moi that by the time multipartyism was being re-introduced in Kenya, in 1991, Jaramogi was already frail, old and sickly.” A multiparty election was held in December 1992 and Jaramogi was elected the MP for Bondo. A year later, on January 20, 1994, Jaramogi was dead.

From 1963 to 1978, Kenya had been a de facto one party state. But in 1982, just before the attempted military putsch led by Kenya Air Force officers on August 1, 1982, the country become a de jure one party state, after Jaramogi and George Anyona, the firebrand politician from Gusiiland, walked to the registrar’s office at Sheria House and demanded to register their party – the Kenya African Socialist Alliance (KASA). Feeling threatened by the duo’s courage and determination to register a new party, one afternoon Moi summoned MPs and asked them to change the constitution to make Kenya a one-party dictatorship.

“Even though Robert Ouko, the brilliant foreign affairs minister, worked for the Kanu government and was a loyal lieutenant of Moi, they still got rid of him, proving that no Luo politician was good enough for a Kenyan government,” opined Oduor. “It has been a tortuous long journey and it’s time we enjoyed some respite.”

Broken promises    

In the aftermath of a contested August 8, 2017 election and the subsequent boycott of the second presidential election on October 26, 2017, the state visited violence on members of the Luo community in Nairobi County, and especially in the lakeside town of Kisumu, which is perceived as a base for the Luo community. In both cities, hordes of youth from the ghetto suburbs of Kibera and Mathare in Nairobi and Nyalenda and Kondele in Kisumu rioted, protesting the gross mismanagement of the election procedure. Many of the youth who were felled by the bullets of state security personnel were Luo youth.

“The Handshake was meant to cool the political temperatures, which were threatening to soar overboard,” said Steve Ochuodho, a researcher in African history. “It was to allow for the country to go back to its normal self and stabilise, with the aim of the country hopefully taking off economically. True, the country stabilised, but nothing much has really happened thereafter.”

The promises that Raila made after the Handshake, ostensibly to the Luo community, are nothing new, explained Ochuodho: “They are the same promises Raila has been making since 1997 when he merged his fledging National Democratic Party (NDP) with Kanu. Since then, it is the Odinga family that has continually grown rich at the expense of the Luo people…”

“Contrary to popular belief being peddled by ‘Raila evangelists’ that the Luos are now in government, nothing could be further from the truth,” noted Ochuodho. “Luos aren’t in the government and more than ever before, they are languishing in poverty. I fret every time I hear that Luos are now enjoying and I ask: Which Luos are these? If there are any Luos in government, they must be Raila’s friends or his relatives from Siaya County,” added the researcher.

The promises that Raila made after the Handshake, ostensibly to the Luo community, are nothing new, explained Ochuodho: “They are the same promises Raila has been making since 1997 when he merged his fledging National Democratic Party (NDP) with Kanu. Since then, it is the Odinga family that has continually grown rich at the expense of the Luo people. Because of these Raila Handshakes, the Luo people are treated as the Odinga family’s captives to be traded with politically any time the family wants to reap financially from the existing government.”

“There are no deliverables, neither are there fruits to be harvested from the Handshake,” said Ochuodho. “All what we are hearing is what it intends to do, It is classic political brinkmanship.” All what the Handshake has done is to entrench even further retrogressive leadership in Luo Nyanza.”

“Through the Handshake, Cyprian Awiti, the Homa Bay governor, came back. Every Luo voter, wherever he or she was, knew Awiti was never going to survive a by-election if the court upheld the petition.” Former Kasipul MP Oyugi Magwanga had successively petitioned both the High Court and the Court of Appeal, only for the Supreme Court to uphold his election victory in August 8, 2017.

With the coming by-election in Ugenya, Raila has already told the voters ahead of time that they should not let him down – that they should return Christopher Karan, who the court found had engaged in electoral malpractices, pointed out Ochuodho. “Kik ukuod wiya jothurwa, (Please don’t embarrass me), Raila told the voters when he went there recently. Even though Karan is unpopular, the ODM party still gave him a direct ticket.” David Ouma Ochieng, Karan’s chief opponent and the immediate former MP, whose petition was heard by the High Court in Kisumu, will be mounting a soap box when the by-election comes up on April 5, 2019.

“The Luo people were not ready for the Handshake,” said Mike Osilo, an information technologist in Nairobi. “Because they were ready for war. The state’s unceasing violence against the Luo people had created in them an appetite for unstoppable bloodshed. They were prepared to go the whole hog.”

Osilo said this hardline stance had been fomented during the October 26 fresh presidential elections when elections did not take place in four Nyanza counties (Homa Bay, Kisumu, Migori and Siaya). “For the first in the history of post-independent Kenya, a people had successively held back a state with all its militarised violence. From then on, the people decided there was no turning back and then the Handshake happened.”

“The Building the Bridges Initiative, the result of the Handshake, has now become a parastatal,” quipped Osilo. “It was meant to give jobs to the favoured boys. Everything is business as usual. If the Handshake and its appendage, the BBI, was serious in developing Luo Nyanza, it would have started by reviving Ahero Irrigation Scheme and the Chemilil, Muhoroni and Sony sugar factories…”

Osilo said Raila’s Handshake compensation promise to the families that lost their relatives in the last election, especially in Kisumu, has remained just that: a promise. “Immediately after the Handshake, Raila went down to Kondele, the site of the greatest state violence visited on a people. Scores of youth were killed by the GSU and Raila that night told their families that the government was going to compensate them. The people were in a very uncompromising mood, but Raila managed to calm them down. Twelve months later, there is nothing to show for that promise.”

“The Building the Bridges Initiative, the result of the Handshake, has now become a parastatal,” quipped Osilo. “It was meant to give jobs to the favoured boys. Everything is business as usual. If the Handshake and its appendage, the BBI, was serious in developing Luo Nyanza, it would have started by reviving Ahero Irrigation Scheme and the Chemilil, Muhoroni and Sony sugar factories, for instance. When I hear people talking of deliverables through the Handshake, I wonder where these deliverables are to be found.”

“Let it be on record: The much talked about dredging vessel brought to Lake Victoria actually preceded the Handshake – Raila just hijacked its launching on January 19, 2019. Likewise, the ongoing resuscitation of the Kenya Breweries Limited plant in Kisumu is not a product of the Handshake: KBL had already given the farmers the go-ahead [before the Handshake took place] to start sowing sorghum. As for the ferry transport on Lake Victoria, the World Bank had already mapped the lake for its Lake Victoria Transport programme as far back as 2016,” noted Osilo.

“One year down the line, the Handshake had become a forum for exchanging insults,” said Ochuodho. “Those who used Ruto to thrust a poisoned dagger into Raila’s back are the same people who are now are using him to stab Ruto in the back.” In Ochuodho’s view, “Canaan had become a mirage”, whose climax was deporting Joshua Miguna Miguna, a deportation Ochuodho squarely blames Raila for. “I can tell you this, the Handshake will not last – it will soon collapse, and after it collapses, Raila will walk away in shame, this time accompanied by old age.” The referendum which is supposed to be the outcome of BBI is “already poisoned,” summed up Ochuodho.

No bridges built in Kisumu

In the lakeshore Kisumu city, the Building Bridges Initiative (BBI)’s first anniversary went unnoticed. The residents we interviewed were resolute that the Handshake was still a puzzle and shrouded in mystery. Hence, the rapprochement means different things to different people. One year after it took place, it still dominates public discussions, eliciting more questions than answers.

“Did the Handshake simply substitute Luo-Kalenjin elite rivalry with the Luo-Gikuyu elite one? Are the Gikuyu elite now holding the ring between Raila Odinga and William Ruto? Who really is our enemy?” posed a middle-aged man at the Bunge la Wananchi (Peoples’ Parliament) meeting taking place under the huge canopy of an oak-like tree off the Kisumu-Kampala Road where real politik is earnestly and hotly debated during the lunch break.

For some of Kisumu’s residents, what the Handshake has succeeded in doing is resuscitate puzzling questions that revolve around Raila’s political deftness and survival instincts. “Raila’s an avid football fan and right now he has the ball…will he, this time just get away with a high ball against William Ruto? If he does, will Ruto, stand between him and the goal? Or, will he this time finally score the winning goal, now that the referees of the presidential tourney seems to be on his side?” mused Willis Ochieng. “Ruto is not a leader, he’s a dealer. There’s no doubt he would be bad for the country – he’s unsympathetic to the feelings of the people. But that aside, the big question that has been disturbing us is, just what is in it for the rest of the spectator crowd?

At the Kondele highway interchange, we met Shem Matiku, a cobbler who plies his trade below the interchange. Kondele was the site of fierce battles between the battle-hardened youth of the sprawling ghetto, who fought back the paramilitary police, the General Service Unit (GSU) in August 2017 after the first presidential election. Matiku had since put that terrible period behind him: “I’m an optimist. I believe Raila has the best interests of his people. Uhuru, unlike Ruto is not a hardliner, he could be a hard bargainer, but a bargainer nonetheless and that is why he made a pact with Raila.”

“Ruto’s too forceful,” reflected Matiku, in between shining his customers’ shoes. “It is as if he’s forcing the people to elect him: it’s either his way or the highway.” The cobbler observed that until Raila went into government, development in Luo Nyanza was lopsided. “Now we’re beginning to see some development our way: Kenya Breweries has reopened its factory and construction of roads has commenced and corruption is being fought…you know what…Raila helped Uhuru see state corruption in the government. Let the spirit of the Handshake flow. We support it one hundred percent.”

However, George Collins Owour, an astute civil society leader, is utterly unimpressed by the Handshake. “We wanted to put up a monument in honour of the victims of political violence, preferably at the Jomo Kenyatta sports ground and have Raila Odinga launch it,” said Owuor. “A monument that would tell the story of the victims of political violence, and a constant reminder to the youth of the dangers of political violence, while at the same time establishing a link between poverty and politics. The monument had been also intended to occupy a space for discussing political violence and how it distracts and destroys lives of many unhinged youth. It would remind them of the dangers of disorganised and unhelpful protests and thereby discourage them from participating in them.”

“The youth are always ready to participate in protests, but where are they now? Some were killed and maimed, others were arrested and falsely accused of robbery with violence and are now languishing in jail, having been forgotten,” lamented Owuor. “The irony is that the county government of Kisumu, while rejecting our proposal, was quick to fast track its own plans of erecting a statue in memory of Jaramogi Odinga.”

“Jaramogi initiated the Luo Thrift and Trading Corporation, which inspired small- and medium-scale business initiatives in Nyanza region. As a social democrat, Jaramogi also led popular grassroots movements for political and cultural awareness in the whole of East Africa,” said Prof Anyang Nyong’o, the Governor of Kisumu.

While the contribution of Jaramogi among the Luo community is in no doubt and cannot be contested, whether in Luo Nyanza or, indeed the entire country, to seemingly bury the history of the youth, who have paid with their lives for fighting for democracy, is callous and deceitful, bemoaned Owuor. “Let us not kid ourselves – the Handshake has not worked for the youth: the boda bodas (motor cycle riders), street vendors and hawkers are still suffering – some lost their lives, others are today living with live bullets in their bodies. Nobody talks about their plight and President Uhuru and Raila have largely forgotten about them.”

Owuor said it would be pretentious to build bridges when the youth have been neglected. “The youth had been promised Canaan. Instead what they got was a Handshake between two political bigwigs who cared for nothing as far as the youth were concerned. Because of this, Raila cannot hold a rally in Kisumu – the youth are still very embittered.”

The divided opinion of Kisumu residents suggested that the Handshake was a self-preservation elite pact. Raila’s core political constituents, still hurting and nursing post-presidential election injuries and injustices since 2007, and suffering biting hunger pangs in these economic hard times, have been forced, yet again, to defer their quest for justice and reparations.

The civil society leader said BBI was a reward for the boys. “I’ve been seeing them in seminars taking selfies, and we’ve yet to see a preliminary report of its findings. If BBI was working, we wouldn’t have heard the kind of political rhetoric and bitterness we witnessed at the Kirinyaga governors’ conference. Truth be told, BBI has been overtaken by events…stupid…succession politics is the order of the day.”

The divided opinion of Kisumu residents suggested that the Handshake was a self-preservation elite pact. Raila’s core political constituents, still hurting and nursing post-presidential election injuries and injustices since 2007, and suffering biting hunger pangs in these economic hard times, have been forced, yet again, to defer their quest for justice and reparations.

Hard feelings, brought about by past betrayals by a cross-section of the Gikuyu elite, the construction of a few road projects, the appointment of a few sons-of-the-soil into public offices, and some subsidy for the beleaguered sugarcane farmers to numb the Luo people’s raw wounds, as they cheat them again, are still very real.

The mixed reactions also revealed a wide gap between the politics that the Handshake enabled at the county level – where incompetent, corrupt, and nepotistic leadership is the name of the game, and where Raila’s hard core support base yearns for a clean and competent government that can deliver healthcare, food, and clean water – and national-level politics, where the very same Raila has been baying for the blood of some of the corrupt, inept and ethnic chauvinists in charge of various ministries.

Drunk with power by proxy

At the county level, the Handshake, it seems, is politics as usual. It starkly reminds Kenyans, especially residents of Kisumu, Homa Bay, Siaya and Migori counties, that their political fortunes or misfortunes since independence have risen or fallen hard with every elite pact, and the ever changing political coalitions, mostly beholden to expedient political interests.

“This time, it’s a call for a big sacrifice from Raila’s political ambitions, an exchange for the quest for justice for the electoral malpractices and victims of police violence, for some ‘development’,” and ultimately, Raila’s quest for the presidency or premiership,” posited Martin Augo.

If Raila’s core support base yearns for competent and accountable county governments is unmistakable, then the Handshake seemed to make such demands only at the national government level, points out Willis Ochieng, a tenderprenuer who has worked in several county governments in western Kenya. “The Handshake,” said Ochieng, “ilituliza joto la siasa, lakini wananchi bado hawana huduma. Ma MCAs, wamesahau hata watu wao kabisa. Wanapigana bunge kujaza mifuko yao tu.” (The Handshake cooled the political temperatures, but the people still lack services. These MCAs have completely ignored the people who elected them. They fight in their respective assemblies to fill their pockets).

In several social media platforms, Kenyans envy the counties that have made remarkable progress and built infrastructure that makes county residents proud, such as the stadium in Kakamega County, the hospital in Makueni County, and the level-six hospital in Kisii County. But hardly anyone envies a hyacinth-free Siaya or Homa Bay or a world class football stadium in Migori. Raila’s strongholds, it seems, have nothing to show for the six years of the devolved government experiment.

Drunk with power by proxy, the party, it seems, is wasting its energy, distracted by chasing “the rat that is escaping a burning house” rather than putting out the fire that is consuming the house. ODM, it seems, reserves its harshest punishment for minnows, inconsequential transgressions and comical infractions, rather than the life-and-death violations of the men-only governors of its core ODM political base…

One hears only an occasional gnashing of clerical teeth, a dissatisfied Anglican Church of Kenya (ACK) Bishop James Ochiel of Southern Nyanza diocese, but hardly a gnashing of the second liberators’ teeth, the custodians of the spirit of the struggle against bad government, among them the Orange Democratic Movement (ODM) party’s honchos.

Drunk with power by proxy, the party, it seems, is wasting its energy, distracted by chasing “the rat that is escaping a burning house” rather than putting out the fire that is consuming the house. ODM, it seems, reserves its harshest punishment for minnows, inconsequential transgressions and comical infractions, rather than the life-and-death violations of the men-only governors of its core ODM political base – men who, except for Prof Nyong’o, are seen as corrupt, nepotistic, incapable and fantastically generous with cash hand-outs, often given to a few hangers-on as they ride out a lacklustre two-term tenure at the helm of the Homa Bay, Siaya, and Migori county governments.

The ODM mandarins and Raila evangelists would rather they shadow and listen to the double meaning of Aisha Jumwa’s supposed disloyalty and sexed-up taunts of kiuno kiuno (hip gyrations) or “Kanugo e teko,” in Kisumu-speak. Aisha Jumwa’s flaunting of her sex appeal, which seems to gain the ire of the mostly male ODM party honchos, might look comical, but it is a timely reminder than the ODM party leaders may have to work extra hard to keep women’s support. Many women who support the party are hurting and hard done by tough economic times.

No justice for victims of political violence

In Kisumu’s Obunga slum, we sat down with two women outside the aptly named New Obunga Pub, who out of fear of reprisal from ODM Kisumu party hacks requested anonymity. “Risasi oweyo goyo udi wa. tear gas orumo,” (The bullets have stopped hitting our houses and the tear gas is no more), said the lady with a spec of gray hair. “The only respite we have now is that people are no longer running helter-skelter…we, at least, can move freely,” intoned her younger friend. “But there is nothing much else: there is no business, no income, we can’t buy anything because we don’t have the money. You just hustle as hard and kama kawaida (as usual nothing has changed). There is no work for the youth.”

Many, especially women, are still hurting and carrying the scars of the political violence of the 2017 presidential elections. They are also deeply impacted by the tough economic times. “Women were raped. Some lost family members, and although some of the victims formed a support group and were given food at the Kenyatta sports ground, they didn’t get any other help,” said one of the women, a human rights defender, who was hunched over an old model laptop plastered with stickers.

Justice for the victims of political violence has remained a sticky sour question. Unlike their counterparts from Central Kenya, many of the internally displaced people (IDPs) or returnees who came back to Kisumu and neighbouring counties are still waiting for the token financial compensation for the loss of land or livelihood.

The majority of the victims of the recent political violence feel let down by their elected leaders. At best, the elected leaders have been opportunistic and at worst indifferent to the plight of the victims. Shena Ryan, who works with a youth group that runs a charity for the poor living with HIV on the outskirts of Kisumu city, said, “It’s not enough to pay for the funeral expenses and give hand-outs to the bereaved for cheap publicity. A politician’s still a politician, always looking out for cheap glorification.”

Ryan reckons that the Handshake had restored stability, no doubt, because “Kikuyus could now again trade freely in Kibuye. We went to the streets, to protest electoral injustices, and some of us were killed. No one has got justice. They are telling us the OCS Nyalenda will be charged. Until these policemen are charged, it will remain just a narrative.”

Said the social worker, “I wasn’t for the Handshake and now, with the knowledge of hindsight, it would have been better had we not poured into the streets. Until the two buffaloes who shook hands come back to the people, purposefully apologise to the victims of the police violence, that Handshake means nothing. Recently, when the duo visited [to attend Jaramogi Oginga Odinga’s memorial in Bondo], we were told, ‘Do not heckle Jakom. Who’s Jakom?’” The Handshake has returned us into a one-part state; we are all now in the Jubilee Party.”

In place of the elected leaders, a consortium of civic organisations comprising the Kisumu City Residents Voice, the Kondele Justice Centre, the National Informal Sector Alliance and Kisumu Joint Bunge Initiative, among others, have stepped in to pursue justice for at least 67 people who incurred various bodily injuries, both in the run-up to and after the 2017 presidential elections.

The consortium has petitioned the office of the Chief Justice of Kenya, asking Justice David Maraga to establish a tribunal to look into how security officers singled out and policed Luo Nyanza region during the last general election, to pursue justice for the victims of police violence, and to recommend the prosecution of the police officers who may be found to have been culpable of violence.

Mixed fortunes

Kisumu residents feel that their elected leaders are also indifferent to their economic plight. “Tich tire” (I’m hard at work) says Governor Prof Anyang’, who valorises the Protestant work ethic. But his constituents, such as Willis Ojwang’, retort, “Tich tire; to kech kecho,” (You are hard at work, but hunger bites sting).

Kisumu is no longer stuck in a socialist-like rut of drab municipal and civil service housing, uniformly dull in a state of disrepair, and the old ubiquitous rickety and dusty Peugeot 404 plying the Kondele-Kondele route that were kept on the narrow and badly maintained roads by the combined genius of the city’s mechanics and take-no-prisoners drivers.

The regional marine transport into the port of Kisumu is as good as dead. And the railway tracks are buried deep in the soil. Yet, the urban poor now cruise through the city’s new road networks and underpasses, four or five passengers in a tuk tuk, (rickshaw-type three-wheeler taxis) or as one or two passengers on a boda boda. Its streets, especially in the CBD, all the way to Kisumu International Airport, are well lit at night.

But the city has not yet turned a corner. Its economy is not yet as dynamic as its demography, especially as it draws in other East Africans, such as the Burundians and more Ugandans, who are hawking consumer goods in search of surplus incomes. More than the Protestant work ethic, Kisumu’s economy is in dire need of structural change, the revival of agricultural sectors and ventures into agribusiness, if only to mitigate the widening gender inequality gap and meet the demands of regional integration.

“How can Raila be happy with the Handshake when it has does nothing for us in Nyanza?” posed the women. “At least during the coalition government, the fish factories were revived. The nusu mkate [half bread] government delivered some economic dividends. The recent pact seems to have no economic agenda for the urban poor who bore the brunt of police brutality in the last presidential elections.”

Although the revival of the KBL Kisumu plant held hope for some, the two women we talked to in Obunga complained that the plant employs people from Nairobi, Uganda, Nyakach, and Machakos, not the residents of Obunga as they had hoped. Worse still, for women who have been left out of the city’s better-paying male dominated boda boda and the car wash businesses, the fish processing companies, which used to employ many women directly and indirectly through trading in mgongo wazi (fish skeletons) is closed. “It was big business for all. But with the coming of the Chinese fish, the companies closed. These companies now use their big freezers and cold rooms to store and redistribute Chinese fish,” said one of the women.

“How can Raila be happy with the Handshake when it has does nothing for us in Nyanza?” posed the women. “At least during the coalition government, the fish factories were revived. The nusu mkate [half bread] government delivered some economic dividends. The recent pact seems to have no economic agenda for the urban poor who bore the brunt of police brutality in the last presidential elections.”

“Prostitution is rife here,” one of the women told us. “If you guys stayed a little longer, you’d see a traffic of women moving up towards Kondele, Gwara-Gwara or Ka-Lorry where sex goes for as little Sh20 per shot. What has the Handshake done for us? It has pushed us into sex slavery,” moaned the woman dejectedly as the sun was setting on Obunga slum.

Youth too have missed the BBI boat. If university students’ campus politics is a good indicator for the shifting political alliance, then Kathy Gitau, the articulate, urbane, and charming vice chairperson of the Maseno University students’ council knows all too well how significant local politics, including campus politics, are intricately tied to the centre.

Clutching a long list of names of students who deserve bursaries this semester, which are due for submission, she agreed that the Handshake, “had cooled down political temperatures …brought political stability, freedom of movement, and good working relationship across ethnic divides, and on campus, bridged the ethnic rift between students”, making it possible for her and team to invoke the spirit of the Handshake to canvass for votes. As a coalition of three women and four men, and as a coalition of a Luo (chairperson), a Kikuyu (vice chairperson), a Luhya (treasurer), a Kisii and Turkana, they had been elected.”

Stated Gitau: “Before the Handshake, it was hard for a Kikuyu or Kalenjin to get elected by the students. Ethnic discrimination against the Kikuyu and Kalenjin was rife among students. ‘Why should we give you a piece of cake here when you have the national cake?’ argued the students. Our competence, individuality, strong gender and ethnic balance swept us into office. All candidates in our coalition, except one, were elected. We won by a landslide,” said Gitau.

Still, Ms Gitau had some reservations. The Handshake, she said, “has bridged the divisions among the ordinary citizens who can now interact freely, but it has also widened the rift among the political class. It has killed the opposition. Raila now has a central role in government because he seems to have edged out Ruto. This could, as well, affect us, pitting us in an endless cycle of disputes and divisions.”

She, however, admitted that she still doesn’t understand what the Handshake is all about. “Is it supposed to end in a referendum? If so, how will we participate in a process whose outcome or end game is unknown or seems predetermined? What is in it for the youth? Be that as it may, the Handshake seems to have shifted the focus away from the Big Four Agenda issues of food, healthcare, housing and industrialisation.”

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Mr Kahura is a senior writer for The Elephant and Akoko Akech is a graduate student at the Makerere Institute of Social Research, presently living in Kisumu.

Politics

Fire and Chaos: Mathare’s Chang’aa Problem and the Optics of Policing

In the 1980s and 1990s parts of Mathare gradually became the epicenter of the large scale production and distribution in Nairobi of chang’aa and a booming local economy emerged that has since become a major source of contestation between the police and the residents.

Fire and Chaos: Mathare’s Chang’aa Problem and the Optics of Policing
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On Tuesday 2 April 2019, social workers, youth group members, activists and friends, all residents of Mathare in Nairobi, hurdled together on the top floor of the Macharia building near the Olympic petrol station at Juja road as they watched in horror, as two schools were set alight by police. Thick, black smoke circled up and soon blanketed the entire valley. Alongside the two schools, another thirty or so houses quickly burned down to ashes in the raging fire. People raced to quell the fire with buckets of water, but were blocked by police in their tracks. Furious shouts filled the air as licking flames destroyed what residents had built over decades; businesses, schools and homes, all gone in minutes.

This criminal act of arson by police of a part of a Nairobi neighborhood took place on the third day of a raid against the local alcohol economy, spearheaded by the notorious ‘killer cop’ Rashid. This police officer gained notoriety after being filmed executing two teenagers on a busy street in Eastleigh in broad daylight on 31 March 2017. Ironically, the raid against the local alcohol economy in Mathare under his command started exactly two years later, on Sunday 31 March 2019. In between, Rashid has killed, maimed and harassed many people, especially young and poor men, in Mathare and beyond, and with absolute impunity.

Subsequently, Rashid was free to walk into Mathare on the aforementioned Sunday while guiding a troop of police officers down the valley where they barged into homes and bars to destroy alcohol and other belongings of local business owners and their employees. Shockingly, the Pangani OCS (Officer Commanding Police Station) and the Area Chief both claimed to ‘have had nothing to do with the raid’, despite eyewitnesses who stated that regular police and AP officers and equipment (such as a well-known land rover used by AP) were employed during the raid. Residents wondered how a full-blown war be waged on residents for days by police without the police officers in charge ‘having nothing to do with it’?

As early as 1930s, women who settled in abandoned parts of the quarry that later came to be known as Mathare earned money through sex work and selling home-brewed alcohol such as busaa and chang’aa

That first Sunday night of fear chaos and gunshots transpired without dead bodies, but many had lost weeks of work and earnings, and others nursed bruises and deep cuts from trying to defend homes and properties from the pillaging police. One of us found his grandmother crying on Monday morning; a woman who has distilled and sold alcohol for more than four decades and has raised her children, grandchildren and great grandchildren while doing so. The police had poured her kangara, the distilling mixture, which had been almost ready for cooking. She lost 4000 shillings, her monthly earnings, and was left in deep debt. Thousands of small business owners and their employees and tens of thousands of their dependents suffered the same fate. On Monday, all the jiko’s (‘kitchens’) near the river remained closed; no one could work while the police patrolled in search of alcohol and production tools to destroy. This went on for yet another day and night, until on Tuesday tensions between angry residents and police culminated into protests by alcohol distillers.

History of the local alcohol economy

To understand the impact of this crackdown on people living and working in Mathare, a brief insight into the history of the alcohol economy is crucial. As early as 1930s, women who settled in abandoned parts of the quarry that later came to be known as Mathare earned money through sex work and selling home-brewed alcohol such as busaa and chang’aa. This area was wedged in by several military and police bases, and the influx of soldiers during the war period (1940-45) attracted a growing number of women in search of work. These women were among the many young people who were forced to leave their homesteads in the colonial confinements of people called ‘Native Reserves’ in the rural areas following soil erosion, population pressures and the demand for ‘hut tax’ (which had to be paid in cash to the colonial government). Even if women comprised the majority of residents in Mathare from the onset, men increasingly migrated to live here—often after being chased from colonial settler farms when mechanization of farm work took hold during the late 1930s. Following these and other developments, Mathare became the nexus of urban resistance against the colonial government and formed an important node in the Kenya Land and Freedom Armies (KLFAs)—also known as ‘Mau Mau’.

After independence in 1963, alcohol production and distribution remained a home-based economy, and houses often doubled as bars where alcohol and sexual services were sold. It was not until the 1980s and 1990s that parts of Mathare (especially the following villages: Bondeni, Shantit and Mabatani) gradually became the epicenter of the largescale production and distribution in Nairobi of chang’aa. According to several bar owners we spoke with, the influx of rural-urban migrants during this period boosted the selling of chang’aa to unprecedented levels. Also, they soon found that the profit margins for chang’aa were much higher than for instance busaa, and soon multiple cooking sites emerged along the banks of the Mathare river. Profit margins have fallen significantly since the 1990s, following a convergence of rising food prices (especially a type of molasses called ngutu) and increasing demands for police bribes since the 2000s. Still, the local alcohol economy sustains thousands of people in Mathare directly and is fundamental to most other economic activities located here.

For example, a major shortage of firewood often plagues adjacent neighborhoods, but every other small business on Mau Mau Avenue in Bondeni, a neighborhood in Mathare, sells large quantities of this wood. These firewood sellers have arrangements with construction companies for frequent early morning deliveries. Old wood from scaffolding at construction sites is transported to the area in trucks so large they can barely enter the ghetto. Every day, these trucks drop off mountains of firewood intended to fuel the widespread and constant distillation of alcohol at the sites near the river. At the same time, young men in search of work hang around these businesses from sunrise to midday to help offload the bulks of firewood and chop them into smaller pieces in return for a small stipend. Suffice to say that thousands more depend indirectly on the alcohol economy in Mathare. All this provides some insight into the abrupt devastation to the livelihoods of thousands and thousands of people caused by frequent crackdowns on the local alcohol economy by police.

After independence in 1963, alcohol production and distribution remained a home-based economy, and houses often doubled as bars where alcohol and sexual services were sold. It was not until the 1980s and 1990s that parts of Mathare (especially the following villages: Bondeni, Shantit and Mabatani) gradually became the epicenter of the largescale production and distribution in Nairobi of chang’aa

After days without work and consequently food, alcohol distillers took to Juja road on Tuesday morning, 2 April 2019, to protest the illegal and violent raid by police. The few media outlets describing the protests squarely blamed ‘angry youth’ for starting the fire. Nothing could be further from the truth. We have spoken to many eyewitnesses who saw police officers deliberately setting the houses and schools alight. The so called ‘angry youth’ were alcohol distillers who had not earned a living for three days. These (mostly) men who make on a good day, Kshs 300 for 10 hours of backbreaking work, barely enough to provide for a family of four. These families do not have any savings to rely on when work is disrupted by state violence, and the illegal raid by police had left hundreds of families hungry for days. This provoked husbands, fathers and brothers to take to street and fight for their families, and they burned tires on the road to underscore their demand to work by blocking traffic.

As has been witnessed by several people, during the ensuing fracas one officer carelessly threw one of the burning tires into a row of make-shift houses and carpentry workshops along Juja road, all constructed of highly flammable materials. Other eyewitnesses saw police officers violently dispersed people trying to stop the fire from reaching the labyrinth of homes, businesses and schools down the street leading into Mabatini, thus effectively enabling the fire to destroy several houses and properties. Teargas was lobbed at the crowds of people who had gathered with buckets of water trying to rescue their homes and belongings. The teargas canisters further ignited the fire as residents watched their schools and homes burn to the ground.

The current modes of chang’aa production in Mathare may occur without a license and may not adhere to regulations, but that does not warrant such a violent and criminal crackdown by police

Distraught, many slept outdoors in the cold on Tuesday night. The fire also destroyed the electricity supply line and the ensuing blackout increased insecurity. One resident recounted that, “For nights, gun shots have become our ringtone.” Another lamented, “We live in a war(zone), but nobody cares.” As Mathare endured this terror for three days and nights, residents watched in disbelief as the evening news headlines either ignored their plight and the criminal acts by police or apportioned the blame decidedly on them using the pejorative ‘angry youth’ frame. Mathare residents were profiled as criminals and the local alcohol economy as illicit and dangerous. Indeed, misconceptions about Mathare and local industries persist. For example, chang’aa was legalized in September 2010 and is not an ‘illicit brew’. The current modes of chang’aa production in Mathare may occur without a license and may not adhere to regulations, but that does not warrant such a violent and criminal crackdown by police. If the production is not up to standard, why not encourage or enable owners, distillers and sellers to obtain licenses and invest in improved production? The answer is simple: too many people high-up in police and government ‘eat’ from the industry as it is.

The Culture of Policing In Mathare

Everyone living and working in Mathare is familiar with the daily routine of police visiting the distilling sites and bars where alcohol is produced and sold to solicit bribes. For each drum of kangara, the police receive at least 200 KES. Let us assume that there are seven distilling sites (we don’t disclose any specific details for security reasons) which have the capacity to process seven drums simultaneously, meaning there are 7 fires operative at each site at all times. Each drum takes three rounds to cook and each round takes 1 hour (45 minutes to distill and 15 minutes to cool). So seven sites and seven fires operating for 24 hours can process 392 drums of distilling mixture per day. For each drum, police receive Kshs 200 and the figure adds up to an average of kshs 70 000 per day and in excess of Kshs 2 million per month. This is a conservative estimate since it does not include the bribes police take from bars and alcohol distributors, and it does not include police officers who run their own alcohol operations. And the number of drums along the riverside also vary immensely. Sometimes, a jiko can have 15 or 20 fires operating at once, while at other times only three or four. The above calculations, though based on thorough research, only serve to give an indication of police involvement and investment in the alcohol industry in Mathare. Considering this, why then does the police initiate a raid to clamp down on the very industry that ‘feeds’ them?

A first part of the answer pertains to internal divisions within police. Police does not entail a homogenous entity, and rumors have it that Rashid and his team were eventually stopped by other police officers in the course of the week because they saw their avenues to ‘easy money’ destroyed. That, at least to some measure, explains why on Thursday the raid was abruptly halted. What’s more, crackdowns on the alcohol economy are not uncommon, despite the entanglement of police in this business. In July 2015, Mathare residents lived through a similar period of police terror which left two people dead and thousands people without work for weeks. Many believe that such attacks are often triggered by a desire of particular police units or individual officers to show, as one resident put it to us, “the ‘higher ups’ that they are doing their ‘job’ and/or deserve promotion”. This time too, many residents believe the notorious Rashid went out of his way to impress in the incoming Inspector General Mutyambai. A resident shared with us that in his view Rashid demonstrated his exceptional cruelty during the course of the raid by forcing a customer of a local bar to drink bleach while he compared bleach to chang’aa. The young punter barely survived this ordeal.

The police officer mentioned here is not the only one. Similar notorious policemen who are known to execute and torture mainly young and poor men frequently patrol most informal urban settlements in Nairobi. According to several of our fellow activists, these plain cloth police officers, called ‘killer cops’ or maspiff by some, are not part of regular police units that are locally known to be connected to specific police stations and which patrol Mathare and surrounding neighborhoods on a daily basis. They told us that these police officers operate under the direct command of the County Criminal Investigations Officer (CCIO). Several (non-state) security groups in Mathare that work together with these police officers revealed to us that several of them also enjoy substantial support by influential business owners, for instance in Eastleigh. The exact operational and support structures of these ‘killer cops’ and how they collaborate with regular police units remain somewhat opaque to local activists and residents, but all agreed that these plain cloth police officers enjoy considerable power and are able to kill with impunity through their powerful back-up.

When considering the relative opacity of their operations, the public visibility of these police officers in Mathare (and other urban settlements) is indeed rather astounding. They are also not a recent phenomenon. Most Mathare residents above 25 years old can easily recall the cruel reign of different ‘killer cops’ as far back as the late 1990s, such as the ruthless Habel Mwareria a.k.a. ‘Tyson’ in early 2000s who was also popularly dubbed ‘the Ghost’ because he often seemed to materialize out of thin air when- and wherever problems occurred. He killed suspects without asking questions, in front of people and in broad daylight and would vanish as rapidly as he had appeared. He was later promoted to the ATPU ( Anti Terrorism Police Unit).

Nevertheless, the ‘killer cops’ gained new strength in popular discourse when in April and May 2017 alleged police officers calling themselves ‘Hessy’ became rapidly infamous by posting pictures on different Facebook pages, under this name, of suspected ‘thugs’ before and after they purportedly shot them. Speculations continue to the date about who or what ‘Hessy’ really is. Some people claim it started with an actual police officer who was shot in the leg and while he was recovering home in the month of April 2017 he started this network of ‘Hessy’s’ on Facebook. This is substantiated to some extent by the fact that there is an infamous police officer who is nicknamed Hessy and who is known to kill mostly young male crime suspects in Kayole. Others say that one officer or a group of police officers from different police stations in Eastlands chose this name because of the reputation of this particular police officer. Others state that the different ‘Hessy’ and adjacent pages on Facebook were not created by one or more police officers, but by a team of bloggers working in collaboration with specific ‘killer cops’. The ‘Hessy’ and adjacent pages (such as Nairobi Crime Free and Dandora Crime Free) soon gained a massive following online and continue to be a topic of intense debate offline, for instance among residents in Mathare.

Local Dynamics and the Future of Chang’aa

Police violence in Mathare, such as extra-judicial killings and illegal raids on people’s livelihoods, are enabled by a combination of factors. In contrast to the knee-jerk homogenization and criminalization of ghetto residents, for instance in mainstream media in Kenya, people inside Mathare are equally divided about the use of (criminal) violence by police. Police use such local divisions inside this neighborhood to push their own agenda. For instance, they work together with residents, popularly dubbed informers or watihaji, who are paid by police for information on people, business activities and other developments locally. This explains how police were able to find the entrance to the jiko’s at the river or the places where bars are located.

However, the incentives of informers to tell on their neighbors often go beyond merely monetary motivations or concerns about crime. Local competition or revenge plays a big role as well. Police also depend too much on such secondary and often faulty intelligence because the local turnover of police, following frequent transfers, is quite high thus limiting the time police have to understand local dynamics. As a result, local informer-networks have some power to manipulate police behavior towards their own agendas. To illustrate, sometimes ‘killer cops’ like Rashid parade a suspect throughout Mathare and when they receive calls from as little as three informers confirming the identity of the suspect, the suspect is taken to a backstreet and executed. Our fellow activists have documented several cases that follow this pattern.

Crackdowns briefly slow production but do not alter the make-up of this industry in any way, yet the Mathare residents who have for generations depend on this economy bear the brunt for the simple reality that they cannot afford to miss a day of work.

The recent raid in Mathare on the local alcohol economy stopped as suddenly as it had started and without any outcome other than destroyed livelihoods, schools and homes and injured people. Slowly, alcohol distillers went back to work on Friday and gradually the local economy picked up again. Such crackdowns have never stopped the local alcohol industry and never will. If the government wants to make the local alcohol industry safer and bring it in line with regulations, it needs to work together with business owners and their employees to develop ways to improve production standards. If alcohol consumption is the problem, why not invest in rehabilitation programs and explore underlying factors that contribute to widespread cheap alcohol consumption, such as vast unemployment and extreme stress? If the government wants people to stop working in this industry all together why not develop alternatives together with them?

Crackdowns briefly slow production but do not alter the make-up of this industry in any way, yet the Mathare residents who have for generations depend on this economy bear the brunt for the simple reality that they cannot afford to miss a day of work.

On Thursday 4 April 2019, one resident asked us: “Who is Rashid? How can he do all this, kill our young men for years, then come to destroy our work, huh? Who is he?”

“Why are there no people coming from Red Cross, or our government leaders, like when Dusit happens or Westgate? Are we not human beings?”

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Liberty for Whom? D-Day’s African Ghosts

Africa tends to be swept under the carpet in the memorials for the two World Wars, which are always couched in terms of, again to borrow a phrase from Trump’s speech, “the ferocious eternal struggle between good and evil” – the Germans being branded as the ultimate evil and the Allies being the forces of good.

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Three-quarters of a century ago, hundreds of thousands of Allied troops stormed the beaches of Normandy in what was the start of a war to save Western Europe from Nazi occupation. American and European leaders gathered at the scene last week to memorialise and honour those who fell, including on the German side. The US President, Donald Trump, began his tribute to them thus: “On this day 75 years ago, 10,000 men shed their blood and thousands sacrificed their lives for their brothers, for their countries, and for the survival of liberty.”

Undoubtedly, much of that is true. From the perspective of those in occupied Europe, it was the beginning of their liberation and the defeat of fascist tyranny. It would inaugurate, for many, an era of democratic freedom and economic prosperity that was at the time unparalleled in history.

Africa tends to be swept under the carpet in the memorials for the two World Wars, which are always couched in terms of, again to borrow a phrase from Trump’s speech, “the ferocious eternal struggle between good and evil” – the Germans being branded as the ultimate evil and the Allies being the forces of good.

President Trump went on to state that “the GIs who boarded the landing craft that morning knew that they carried on their shoulders not just the pack of a soldier but the fate of the world.” This may be true, but the world is not just Western Europe; from the perspective of those on the African continent, the GIs were not there to shore up liberty and democracy, but rather to free countries that were themselves engaged in colonial plunder and occupation.

Africa tends to be swept under the carpet in the memorials for the two World Wars, which are always couched in terms of, again to borrow a phrase from Trump’s speech, “the ferocious eternal struggle between good and evil” – the Germans being branded as the ultimate evil and the Allies being the forces of good.

But there was little that was “good” about what these same countries were doing and would continue to do to the people in Africa whose land and resources they were continuing to steal and whose people they not only oppressed but also press-ganged into their wars. More than a million Africans fought in World War II – hundreds of thousands of them were sent to the front in Europe, others to India, Burma and the Pacific islands. Few understood why they were fighting, let alone why they volunteered to do it. Many died and survivors today receive nothing of the recognition and adulation bestowed on their European and American counterparts.

Now it is probably true that a world governed by the Nazis would have been much worse for Africans than the present one, so in that sense their defeat was good for the continent. But in that case, it could also be argued that the two World Wars, which exhausted the European powers and shattered the myth of white invincibility for the returning African veterans, were also good in that they paved the way for the end of colonialism. In either case, the uncontested fact would be that these were not wars to free all people but rather to determine who would be their overlords – despite the rhetoric, they were fought less for global liberation than for global domination.

David Frum, in his brilliant piece for The Atlantic, “The Ghosts of D-Day”, notes how the memory of D-Day and the liberation of Europe have been distorted in French and American imaginations. In truth, it is not just American memories that have “become more triumphalist and self-aggrandizing”. The memorials at Normandy are not so much about remembering history but rather spinning it. And within that spin, the tale of the Africans has no place – it muddies the moral waters to admit that the liberation the Allies sought did not include that of the black and brown peoples they were oppressing; that those on this continent had, and to a large extent still have, little share in the freedom that was heralded on that day.

However, what is today undeniable is that the Allies were guilty of committing, and would go on to commit, many of the same crimes that qualified the Nazis as evil – from implementing a racist occupation, to genocides, to interring entire communities in concentration camps, to jailing homosexuals, to looting cultural artefacts and art.

For Africans, the irony is that the tools for making concrete the memory of what the European nations were actually doing – the records and documents that tell the story of the occupation and the crimes that were committed against Africans – are, for the most part, either deliberately destroyed or safely hidden away in European vaults. Many were stolen at the end of the colonial occupation in an effort to maintain the fiction of its benevolence.

However, what is today undeniable is that the Allies were guilty of committing, and would go on to commit, many of the same crimes that qualified the Nazis as evil – from implementing a racist occupation, to genocides, to interring entire communities in concentration camps, to jailing homosexuals, to looting cultural artefacts and art. Yet, unlike the Germans, who have owned up to “the unforgettable rupture of civilization that [they] provoked in Europe” and to the fact that “the fallen German soldiers are resting in foreign soil not because they came as liberators to this country but as occupiers”, there has been no such admission from the Europeans with regard to their occupation of Africa. Today, they still repeat the lie that colonialism was about bringing civilization and the benefits of modernity to the primitive peoples of the continent rather than implementing a system of extraction that continues to bleed the continent to this very day.

In 2017, Bruce Gilley, a professor of political science at Portland State University, published the article, “The Case for Colonialism” (withdrawn after a public uproar and death threats), in which he argued that Western colonialism was both “objectively beneficial and subjectively legitimate”. He further advocated for “colonial modes of governance; by recolonizing some areas; and by creating new Western colonies from scratch”. While much of this has been debunked, he is hardly the only one to go public with such views. In the same year, the former leader of South Africa’s Democratic Alliance, Helen Zille, was removed from her leadership roles after she put out a series of tweets touting the benefits of colonialism.

Rather than the selective and hagiographic portrayals we are treated to today, a better memorial for D-Day would be to return the colonial archives and to acknowledge the truth – the whole, unvarnished truth – about what was being defended on that day. For it surely was not the ideal of liberty for all. Importantly, this would include an acknowledgement and compensation for the Africans who were forced to fight and die in the wars that were not of their making.

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Another False Messiah: The Rise and Rise of Fin-tech in Africa

The rise of a global technology industry to support financial services, known as fin-tech, has grown enormously in Africa in the last decade. Across the continent, many commentators have proclaimed fin-tech as the solution to poverty and development. Examining the case of Kenya’s celebrated fin-tech model, M-Pesa, Milford Bateman, Maren Duvendack and Nicholas Loubere reveal a flawed system that is not an answer to poverty, despite the wild claims of some academic commentators. Quite the contrary, fin-tech offers Africa a further case study of how contemporary capitalism continues to under-develop Africa.

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Another False Messiah: The Rise and Rise of Fin-tech in Africa
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In both the global investment community and the international development community one of the most talked-about issues today is fin-tech (financial technology). Defined as ‘computer programs and other technology used to support or enable banking and financial services’, the last decade or so has seen the rise of a new global fin-tech industry, a development that is widely regarded to be positively changing the world in a variety of ways. Thanks to almost daily reports of major new investments, especially in Africa, many investment professionals are of the opinion that something akin to a new ‘gold rush’ is clearly underway. At the same time, the fin-tech model is also touted as an innovation that will greatly benefit the global poor, with enthusiastic supporters claiming that a new golden age of ‘inclusive capitalism’ is upon us.

By far the most well-known example of the fin-tech model to date is Kenya’s M-Pesa – the agent-assisted, mobile-phone-based, person-to-person payment and money transfer system. M-Pesa is widely seen as the first fin-tech institution to conclusively demonstrate that it is possible to make a profit while also very meaningfully improving the lives of the poor. Taking inspiration from M-Pesa, many in the international development community now regard the fin-tech model as a potentially game-changing private sector-funded driver of development and poverty reduction in the Global South.

In both the global investment community and the international development community one of the most talked-about issues today is fin-tech (financial technology)

In the academic community the apparent combination of poverty reduction with profit generation proved to be a very seductive pro-capitalist narrative that many mainstream economists were only too willing to engage with. The most well-known academic economists examining the impact of M-Pesa are Tavneet Suri, based at MIT, and William Jack, based at Georgetown University. With extensive funding from Financial Sector Deepening (FSD) Kenya and the Gates Foundation, since 2010 Suri and Jack have produced a series of outputs extolling the benefits of M-Pesa. Suri and Jack’s generally positive findings have resulted in mainstream media attention and large numbers of citations. This has played an important part in galvanising the international development community into supporting the fin-tech model as a development and poverty reduction intervention.

In particular, their 2016 article published in the prestigious journal Science, entitled ‘The Long-run Poverty and Gender Impacts of Mobile Money’ has played a considerable role in sparking the imagination of the international development community. This is mainly because of its sensational claim that ‘access to the Kenyan mobile money system M-PESA increased per capita consumption levels and lifted 194,000 households, or 2% of Kenyan households, out of poverty.’ According to this article, M-Pesa was not just making profits, but the evidence seemed to show it was also making an astonishing ‘bottom-up’ development and poverty reduction contribution. This poverty reduction claim, often cited in full in media articles, quickly became the centrepiece of the evidence used by many in the international development community to justify its increasingly strong support for, and investment in, the fin-tech model.

M-Pesa is widely seen as the first fin-tech institution to conclusively demonstrate that it is possible to make a profit while also very meaningfully improving the lives of the poor.

Unfortunately, all that glitters is not gold. As we write in a Briefing just published in the ROAPE Suri and Jack’s hugely influential signature article actually contains a surprising number of errors, omissions, poor logic, and methodological flaws. Crucial labour market evaluation parameters, such as business failure (exit) and the impact of new businesses on existing ones (displacement), were entirely over-looked. The core issue of individual over-indebtedness, which in Kenya is now approaching crisis levels and which has a clear and direct link to the operation of M-Pesa, was not even mentioned as a possible downside of the fin-tech development model. For such an important and well-financed project, the methodology was also weak, diverging from many of the standard ‘best practices’ in the impact evaluation field. The important issue of causation was also raised, but in a way that we found to be questionable at best. In many ways, therefore, Suri and Jack’s analysis appears to misrepresent and vastly over-state the development impact of M-Pesa. 

Fin-tech represents a new form of resource extractivism

One of the most disturbing aspects of Suri and Jack’s flawed analysis, however, is that they completely bypass the crucial equity and distributional issues that arise from the operation of M-Pesa and other similar fin-tech corporations. This is inexcusable because there are clear warning signs today that the fin-tech model possesses the potential to extract immense value from the poorest communities in the Global South, with potentially calamitous long-term consequences. Like the gambling, sub-prime mortgage and payday loan industries in the United States and UK that before and after the financial crisis of 2008 were able to grow rich by expertly extracting massive amounts of value from the communities of the poor, one might argue that Kenya’s poorest communities are also being drained of much of their needed collective wealth.

M-Pesa has essentially perfected a form of ‘digital mining’ that captures and extracts a small tribute from each and every one of the growing number of tiny financial transactions made by the poor through the platform (which has become ubiquitous and very difficult to avoid). This includes microloans, money transfers, grant disbursement, credit card usage, pension payments, and so on. One simply cannot escape from the fin-tech ‘net’ that is gradually being lowered on to the poor. As more and more governments and elites are brought in as allies by the fin-tech industry, this value extraction process is only likely to speed up and intensify, with cash transactions being increasingly jettisoned and ever more transactions being mediated by fin-tech organisations.

M-Pesa has essentially perfected a form of ‘digital mining’ that captures and extracts a small tribute from each and every one of the growing number of tiny financial transactions made by the poor through the platform

By the same token, given the profit motive at play, it is inevitable that a range of services and products will end up being pushed on to the poor even though they largely do not need them, are not able to productively use them, or do not have any means to repay debt associated with them. The value realised through such ‘digital mining’ techniques is then extracted from the local community and deposited into the hands of the fin-tech entity’s owner(s). However, with so many fin-tech entities backed by foreign capital from the Global North, the chances are that a large proportion of this ‘digitally mined’ value will head abroad to the world’s leading investment locations.

What we have here, therefore, is a value extraction process that contains the potential to progressively undermine the development process in local communities in the Global South. It does this in two important ways: first, it denies the local community an extremely valuable aggregate amount of local spending power, which is instead appropriated by wealthy individuals and institutions, many of which are located abroad. This renders an important endogenous growth trajectory inactive, since it is rising local demand that often provides the initial impetus for local enterprises to emerge in order to meet this demand. Second, fin-tech institutions also starve the local (re)investment cycle by siphoning value out of the community, and thus make it more difficult for local businesses to access the meaningful amounts of capital needed to establish sustainable commercial operations. Experiences in Asia with local banking from 1945 onwards, for example, show that reinvesting/recycling the bulk of locally-generated value back into the local economy has significant potential to kick-start economic growth.

Fin-tech could, therefore, be seen as a revised version of the natural resource extraction paradigm that was largely responsible for under-developing Africa and other colonised countries over the last four centuries. The ‘resource’ increasingly being extracted from Africa today might no longer be a physical one – such as diamonds, gold, platinum, or silver -and the process might not require slavery, the employment of ultra-exploitative waged labour, or involve horrendous working conditions, but the eventual negative outcomes of ‘digital mining’ could very well be the extension and continuation of under-development.

M-Pesa thus provides us with a valuable case study of how contemporary platform capitalism operates in neoliberal Africa and how ‘digital mining’ might actually affect Kenya’s potential growth and development. In recent years, Safaricom (M-Pesa’s parent company) has become far and away Kenya’s largest company, now accounting for a massive 40% of the total stock market valuation on the Nairobi securities exchange. Safaricom is also famous for its spectacular profits. In 2019 it set a record by registering profits of around US$620 million, which would be an impressive result in even the richest countries of the Global North. To put this into perspective, this figure is slightly more than the Kenyan government spends on the entire healthcare system in the country. However, along with an additional bonus paid out in 2019 to shareholders amounting to around US$240 million, a large percentage of this US$620 million in profit was paid out as dividends to foreign shareholders. The main beneficiary was the majority shareholder (at 40%) of Safaricom, the UK multinational corporation Vodafone. Other beneficiaries are a variety of mainly foreign investors located in ‘tax-efficient’ locations (the Caribbean mainly) and who hold a 25% stake. The Kenyan government also holds a further 35% stake in Safaricom.

Fin-tech could, therefore, be seen as a revised version of the natural resource extraction paradigm that was largely responsible for under-developing Africa and other colonised countries over the last four centuries.

This demonstrates that significant value is being created by M-Pesa based on the tiny transactions of the poor, but most of it is spirited abroad via dividend payments to foreign shareholders. This helps explain why M-Pesa has become a beacon for global investors and financial institutions all seeking their own spectacular fortunes in Africa while framing their thirst for profits as altruism. Indeed, by embedding the fin-tech model in Kenya, the international development community is complicit in the establishment of a high-tech extractivist infrastructure similar to colonial-era equivalents.

‘Digital mining’ in Kenya and the foreign appropriation of the wealth generated by those languishing at the bottom of the pyramid is a less directly brutal undertaking than the value extraction process carried out in colonial times.  However, the extractivist logic, the wealth transfer, and the determination to accumulate on the back of the poor have a similar character to colonial-era economic regimes, and similar potential to seriously damage socioeconomic development in the long-term.

Furthermore, as in colonial times, a local elite has been allowed significant freedom to manage this ‘digital mining’ on behalf of the foreign owners. As with Capitec Bank in South Africa, it is no secret that the CEO and senior management at Safaricom have been able to use the company as a vehicle through which to extract fantastic rewards for themselves, enjoying Wall Street-style levels of remuneration in recent years and with several becoming multi-millionaires as a result. However, this also provides the obvious incentive to grow Safaricom as fast as possible because in that way the personal rewards attributable to those at the top are maximised. As a result, Safaricom’s CEO and other senior management have pushed growth to the limits and are now encountering problems in several areas on account of reckless over-expansion, including with regard to the company’s wilful engagement with gambling. In addition, in the early stages of M-Pesa’s growth, certain still unidentified members of the local Kenyan elite were able to secure for themselves a sizeable shareholding in Safaricom, which they later sold off for massive capital gains. Pointedly, the impact on inequality in Kenya arising from these narrow elite enrichment mechanisms has been very significant.

Despite the benefit that some individuals in poverty undoubtedly enjoy as a result of M-Pesa’s services, universal financial inclusion has come at a very high longer-term price for Kenya’s poor overall.

In short, an effective value extraction process involving ‘digital mining’ has been established in Kenya, which has been misleadingly framed by many in the international development community as contributing to ‘bottom-up’ development. This process has ensured the stratospheric enrichment of a narrow group of foreign investors, Safaricom’s own senior managers, and a section of the Kenyan elite. However, this value has effectively been appropriated from M-Pesa’s overwhelmingly poor clients via their growing bundle of tiny fin-tech-mediated financial transactions.

Despite the benefit that some individuals in poverty undoubtedly enjoy as a result of M-Pesa’s services, universal financial inclusion has come at a very high longer-term price for Kenya’s poor overall. Safaricom appears to have become a classic example of the ‘cathedral in the desert’ syndrome – a vastly profitable entity that exists only by ignoring the impoverishment it is helping to create in its wake. As fin-tech spreads across Africa, it is likely we will see similar deleterious extractionist scenarios emerging.

Might we not then consider M-Pesa to be the canary in the coalmine?

Parallels with the failed microfinance revolution?

Our analysis of Suri and Jack’s hugely influential 2016 article shows that it simply does not stand up to scrutiny. One might conjecture that this has something to do with the fact that much of the funding for their work over the past decade has come from FSD Kenya and the Gates Foundation, two of the world’s leading advocates for the fin-tech model.

In this context, it is interesting to recall how the now largely discredited microfinance movement got a game-changing boost back in the 1990s thanks to a study by two high-profile World Bank economists – Mark Pitt and Shahidur Khandker – claiming that microfinance in Bangladesh was generating major poverty reduction benefits for women Pitt and Khandker’s work was much later shown to contain many serious errors and its conclusions were unsound. Nevertheless, Pitt and Khandker’s work more than served its immediate purpose, which was to galvanise support within and around the international development community for an intervention that the World Bank desperately wanted to see go forward on ideological grounds. We might therefore pose the obvious question here with regard to the misrepresentation of M-Pesa’s impact: are Suri and Jack the new Pitt and Khandker?

 

Editors Note: This article was first posted in the Review of African Political Economy (ROAPE)

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